Percentage-off sales never build loyalty but can destroy price image. It is never wise to tell customers that there is a good time to buy and a bad time to buy. It is not good to refer to your normal everyday prices as the high price example. Comparison pricing should refer to competition, not your own store. The first 20% off sale feels good, but then you find yourself falling down a rabbit hole without an escape. Every repeat costs more and returns less.
It is interesting to compare the marketing strategies of Bed, Bath and Beyond in the U.S. with the failed marketing program at the now defunct Praktiker, once the largest home center chain in Germany. 20% off coupons were the backbone of both companies marketing programs.
While Bed Bath and Beyond is clearly working to reset their marketing program, 20% off coupons were heavily used this past quarter and comparable store sales were negative. Customer loyalty is dependent on trust. Trust lost is hard to restore. The fact is that in today’s digital world, the customers have perfect knowledge. The price must be right every day on every item to earn the customer’s trust in the brand’s value image.